By October 14, 2008 2 Comments Read More →

Lean Cultures in the Top Small Workplaces

Top Small Workplaces 2008 – WSJ.com

Today’s WSJ was well worth the $2.00. Yes, I subscribe to the online Journal, but there’s something nice about reading the regular print version while traveling. Maybe I should just buy a Kindle as a different way of avoiding printing articles from home? Has anyone used the Kindle?

OK, I sidetracked myself. Do whatever it takes – beg, borrow, or steal to get a copy of the special “Top Small Workplaces 2008” section. Beg, borrow, or steal…. that DOES sound like Wall Street. OK, sidetracked myself again. Focus.

This section had some amazing profiles of some small company cultures (well under 1,000 employees for each company, many much smaller). It was hard to see the magic in some of the profiles — ooh, they have incentives for employees, how innovative (not really). And not every winning company has the stereotypical foosball table (although one does). Playing soccer in the hallways does not make for a cool company — having the right leadership and culture does much deeper than that.

A few of the listed companies really stood out as embracing Lean or Deming management principles in one way or another. I bet it’s easier to do this in a small company — “best small companies” could just be “best companies” even though they aren’t the biggest companies in revenue. They seem to be the biggest in spirit and morale. So here we have the Lean Blog “best of the best” choices:

ATA Engineering Inc.

Dr. Deming would love this:

Bonuses also have an egalitarian flavor: All workers receive an equal percentage of their salary as an annual bonus. The setup works that way for a couple of reasons. ATA leaders believe that every employee should reap the rewards of the whole team. Managers also feel it’s too hard to accurately assess how much one employee deserves a bonus over another; singling people out could result in unfairness and resentment.

“It’s a controversial topic, but what we’ve found is it’s extremely difficult to be fair and consistent if your bonus policies are too differential,” says General Manager and Chairman Jeff Young. “Someone who made a big splash may be compensated, but someone who was silent and didn’t speak up wouldn’t be.”

That type of approach isn’t very common, is it? Most managers insist they can somehow peg each individual’s contribution to a team (or a very large corporation). Having been under many compensation programs in different companies, I still believe Dr. Deming’s idea that individual incentive systems create more problems than they’re worth (if it were my company).

One company in the WSJ list, J.A. Frate Inc. selects one trucker to be “Driver of the Year.” I think it’s clear Dr. Deming would say “boo” to that, as that system only creates one winner, and many losers.

Integral Project Management Co.

Dr. Deming also preached that feedback to employees shouldn’t come just once or twice a year. This company follows that approach:

Many companies give employees feedback once a year in a performance review. At Integrated Project Management Co., feedback is a very frequent — and highly structured — process.

Each IPM employee sits down for a weekly one-on-one meeting with his or her manager in which they discuss work progress, the employee’s performance and the skills that need improvement. Managers also regularly provide employees with an “event summary” in which they evaluate how an employee handled a specific task such as leading a company meeting and provide concrete steps for improvement.

The reason for all this feedback, says founder and Chief Executive C. Richard Panico, isn’t to intimidate or make employees feel inadequate. It’s more like coaching, given in a “very encouraging” manner, to help employees get the skills they need and move up into leadership roles, as well as to instill company values.

Dr. Deming always said “substitute leadership.” Sounds like IPM does just that.

Landscape Forms Inc.

Here’s a company that uses Lean-speak (or buzzwords) — kaizen (continuous improvement) and muda (waste).

Today, the company still practices and teaches those principles and has devised several of its own ways for employees to be actively engaged in decisions that affect their immediate work. One way: an employee-suggestion system dubbed “muda removas.” A play on a Japanese term, it translates as “getting rid of waste.”

In this process, developed by Landscape management, employees and their teams come up with ways to make their jobs more efficient and effective. If the whole team agrees on one employee’s idea, it can be implemented — without approval from senior management.

I love that last part. A suggestion process doesn’t have to be bureaucratic. And guess what? This will come as a shock to many managers — you aren’t needed to approve every single change that is proposed. You don’t have to let managers or upper management be a bottleneck in the improvement process.

Landscape documents how many muda removas are implemented and publishes them in its employee newsletter. So far this year, the company has implemented more than 1,400. Many are small changes, such as slightly altering the manufacturing process in a way that makes assembly easier, but they can make a big difference in one employee’s job satisfaction or efficiency.

This is a method I use and teach — publishing (ideally on bulletin boards) the improvements that staff members have made. Simple before and after diagrams and illustrations showing the impact of changes. This is a method that Norman Bodek talks about every chance he gets — it’s the core of the Quick and Easy Kaizen method (that you can read about in this book: The Idea Generator: Quick and Easy Kaizen ).

“What happens in traditional suggestion systems is you hand suggestions off to some group and then they tend to pile up,” says Landscape President Bill Main. When people don’t see their suggestions acted upon in a timely manner, “they get discouraged.”

Landscape has also encouraged the use of its muda-remova procedures to enlist employees to come up with cost-saving ideas in their immediate areas that would save the company money, at a time when it’s struggling to compete with companies moving manufacturing overseas.

I can’t emphasize that point about suggestion boxes enough. When they work, the review of ideas and suggestions is normally a pretty “batchy” process — managers review the ideas and give them a thumbs up or thumbs down (often finding excuses to say NO) on a monthly basis (or less frequently. That’s a long lag time for getting the good ideas approved and into action. At their worst, the suggestions literally rot in the suggestion box. One hospital laboratory I worked with had LOST (seriously… they lost it) the key to the one suggestion box. Needless to say, they started using a more visual approach that avoided boxes and batching altogether — the method from David Mann’s outstanding book: Creating a Lean Culture: Tools to Sustain Lean Conversions

Did you see any other ideas you liked in the WSJ feature? Any ideas in there that you would NOT consider to be part of an outstanding work culture? What about your company? What are the aspects of your culture that make it a great place to work (or not)?

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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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2 Comments on "Lean Cultures in the Top Small Workplaces"

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  1. Anonymous says:

    I wish I hadn’t read this just before sitting down to type out my list of individual accomplishments so I could be judged by a group of managers who are so incredibly disconnected from my work that they can’t judge my performance, yet alone rank me against my peers…. ah, corporate bullshit. I wish I could be part of one of these teams in the article.

    Time to polish up the resume next.

  2. Mark says:

    Nice post, Mark. I actually work for the nonprofit, Winning Workplaces, that partnered with WSJ in 2008 (as well as ’07 and ’09) for what is now the top small company workplaces award with our new media partner, Inc. Magazine. I must have missed when you wrote about us originally in 2008.

    I thought your readers might be interested in a post I wrote on our blog advocating use of lean practices, one of 20 proven workplace team building strategies: http://bit.ly/6sBWyR

    Thanks for helping to spread the word about small businesses that are excelling based on their high employee engagement!

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